B ANGKOK - Cambodian Minister for Planning Chea Chanto has called for private investment
to help fund millions of dollars of infrastructure projects to secure Cambodia's
place in the Greater Mekong sub-region.
His call, made at a three-day regional seminar in Bangkok last week, was echoed by
a chorus of senior international development bankers.
The Greater Mekong Sub-Regional Growth Summit was held to promote greater business
and development cooperation between Cambodia, Laos, Myanmar (Burma), Thailand, Vietnam
and the southern Chinese province of Yunnan.
The six states make up the Greater Mekong sub-region, offering a potential market
of more than 225 million people.
The conference discussed ambitious proposals for inter-connected networks of road,
rail, river and air transport facilities between the states.
But it was widely agreed that the huge cost could not be borne solely by their governments
or by international development financiers such as the Asian Development Bank (ADB),
a prime mover behind the proposals.
In a paper presented on his behalf at the conference, Chanto said investment was
needed to develop major roads in Cambodia, particularly the more remote regions.
Funding was needed not only from bilateral and multilateral donors but also the private
business sector, Chanto said
Cambodia had much to offer private investors. It had "exploitable hydropower
resources" capable of producing 8,000 megawatts of electricity, along with commercially
viable oil and gas fields.
Tourism assets, natural resources and an "unlimited labor force at reasonable
cost" had great potential.
Chanto said Phnom Penh's priorities were to achieve macro-economic stability, structural
reform, human resource development and improved physical infrastructure.
He pledged support for regional cooperation, saying that Cambodia was "seriously
committed to cooperate in any beneficial undertaking to further the economic cooperation
and development of the region."
In 1992, the six Greater Mekong sub-region countries launched a program of economic
cooperation, later reaching agreement to develop areas such as transport, energy,
tourism, telecommunications, human resources, trade and investment.
The governments have so far supported 77 priority projects - 34 in transport, 12
in energy and 11 concerning the environment.
A recent ADB assessment presented at the conference detailed the range of major infrastructure
projects that Cambodia would participate in, mainly in the transport sector.
A key area of collaboration proposed is a regional network of highways linking Bangkok,
Phnom Penh, Ho Chi Minh City and the Vietnamese port of Vung Tau.
The ADB estimated the cost would be between $123-207 million, and would have to include
a completely new road between Bangkok and Phnom Penh.
Meanwhile, a further $50 million would be needed to link northeastern Thailand, southern
Laos, northwestern Cambodia and central Vietnam.
Other possibilities included improving roads between southern Laos and Sihanoukville,
giving Laos access to a seaport through Cambodia.
Also slated in the ADB's proposals are river navigational improvements between Laos
and Cambodia, but "critical security constraints" made detailed surveys
impossible at present.
Although there were road, railway and river projects proposed, the ADB recommended
the highest priority be given to roads as they were "the dominant mode for freight
and passenger transport in the region."
Tram Iv Tek, Secretary of State for the Ministry of Public Works, told the Post that
external funding was needed for road projects in western Cambodia.
This was especially so for a proposed road link from Thailand's Tak province, on
to Cambodia's Route 4, and then Veak Ranh to Hu Thien in Vietnam.
Tek said Cambodia hoped to make road investment a priority under its next loan payment
from the ADB, but private investment was also required.
ADB director of programs (west) Noritada Morita said the bank had provided over $280
million in loans for priority road and air transport, and energy, projects in the
sub-region. A further $7.6 million had been given in technical assistance grants.
Between 1996-98, the ADB was set to lend more than $250 million for more such projects.
But a "major constraint" to implementing all priority projects was that
their total costs exceeded "the financial capacity of the six governments and
official development assistance commitments."
"Private sector finance, expertise, management skills, technology and capital
are important ingredients to the development of the six countries," he said.
"It is the investment, production and marketing decisions of firms that can
provide the push for cooperation in the Greater Mekong sub-region."
Former Thai deputy prime minister Dr Supachai Panitchpakdi also raised concerns about
the lack of private sector involvement.
He added that Thailand's financial sector was "willing to make itself avail
for these projects" and to "draw on our financial resources and the overseas
banks that are based in Thailand."
But he also noted that private investment needed to be "kept under control"
to ensure investments were beneficial to companies and socially responsible.
The Chief Economist for Stand Chartered Bank (south-east Asia), Dr Wong Yit Fan,
raised doubts about the viability of many of the projects raised by the ADB.
"The interesting question was whether the Greater Mekong sub-region was viable
or not," he said.
"If it is viable and the private sector sees that it is viable, not withstanding
whether they are from Burma, or Thailand - or even from Europe...there would be even
more action, more activity on the private sector to get involved."
"The curious thing is the lack of private sector initiative, the distinct lack
of it here brings about a few questions," he said.
He also questioned whether the investment in the cross-border infrastructure could
not be better spent on local projects within the individual countries.
"Could [the countries] not use these resources to build up the infrastructure
in individual countries so as to bring out those products that they are producing...
to the global market in a timely, cost-effective and efficient way?"
